Nosture Place operates a commercial plant nursery where it progresgates plants for garden centers throughout the region. Nature Pace has $4.9 milion in assets. Its yearly fixed costs are $622,000, and the variable costs for the patting sol, cantainer, label, seedling, and listor for each gallon-sized plant total $1.30. Nature Place's vuluine is currerilly 480.000 units. Cornpelitur offer the same quality planls to garder centers for 54.00 each. Garden Centers therriars their up to sell to the public for $8 to $11, deveriving on the type of planl. Read the foulement Requirement 1. Nature Place owners want to earn a 14% return on the company's assets. What is Nature Place's targetful cost? Calculate the targat full cost for Nature Placa, Salact the formula labels and enter the amounts Revenue at current market price S 1,920,000 Lees: Desired profit 886.000 S 1.234.000 Targetful cost Requirement 2. Giver Nature Place's cutent costs, wil its owners te able to achieve their target profit? Show your analysis. Calculate Nature Place's current local ful cost Select the formula labels and enter the amounts. Current variable costs 5 624,000 Current fixed costs 682,000 $ 1.305,000 Total full cost Nature Place's current total full costs of S 1.305,000 is higher than its larget full coet. Nature Place will not mect the owner's profit expectations. Requirement 3. Assume that Nature Place has identified ways to cut its variable costs 10 $1.15 per unit What is its new target fixed cost? Will this decrease in variable costs alkw the company to achieve its target profit? Show your analysis. Targetful cost 1234000 LEES: Reduced lavel of variable costs New largel fixed costs Requirements 1. Nature Place owners want to earn a 14% return on the company's assets. What is Nature Place's target full cost? 2. Given Nature Place's current costs, will its owners be able to achieve their target profit? Show your analysis. 3. Assume that Nature Place has identified ways to cut its variable costs to $1.15 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company to achieve its target profit? Show your analysis. 4. Nature Place started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Nature Place doesn't expect volume to be affected, but it hopes to gain more control over pricing. If Nature Place has to spend $110,400 this year to advertise and its variable costs continue to be $1.15 per unit, what will its cost-plus price be? Do you think Nature Place will be able to sell its plants to garden centers at the cost-plus price? Why or why not? Print Done